The unanimous vote requires qualifying power users to accept a 15-year commitment, fund system costs, post substantial collateral and stand first in line for curtailment.
The Imperial Irrigation District has unanimously adopted a new tariff for exceptionally large electricity users, creating a formal utility test for data centers and other high-demand projects seeking to connect in the Imperial and eastern Coachella valleys.
The Sept. 15 vote established the rules a qualifying project must satisfy before IID will agree to serve it.
The new Schedule LL applies to new or expanded customers expecting demand of at least 20 megawatts and a load factor above 80 percent, meaning they would use most of their contracted capacity for most hours of the year. Service would be delivered at 69 kilovolts or higher and could be interrupted at IID’s sole discretion before the utility curtails customers on other rate schedules.
The framework also puts the financial risk squarely on the applicant. A customer must pay for studies and infrastructure, sign a contract lasting at least 15 years, post a deposit equal to no less than three months of its highest estimated charges, maintain substantial collateral and pay an exit fee if it leaves early or reduces its contracted capacity.
Those provisions turn what began as a response to rising data-center interest into one of the most consequential new economic-development screens in IID territory. When the draft tariff surfaced in May, IID said it had received nine large-load proposals or inquiries at varying stages. The district has not publicly identified the names of their entities, locations or combined demand, and its approval announcement did not update the status of that pipeline.
A contract built around ratepayer protection
IID officials said the tariff was written to keep the cost of a large private project from migrating onto existing residential, commercial and agricultural customers. The district would study each application to determine whether it could be served reliably, which transmission and substation improvements would be required, and what long-term power purchases or other resources would be needed.
The applicant would pay the actual cost of those studies and would be responsible for the facilities on its side of the point of ownership, as well as the land rights, permits and site work needed for project-related substations, distribution facilities, transmission facilities and other upgrades. IID would own and operate transmission interconnection facilities on its side of the delivery point.
The tariff’s minimum-charge provisions are designed to protect the district if a project consumes less power than promised. Each month, the energy charge and demand charge would be based on the highest of actual use, 85 percent of the contracted amount, or additional charges triggered by excessive consumption. The customer would also pay the cost of renewable-energy compliance and provide weekly hourly forecasts for scheduling.
A customer seeking to terminate service or reduce capacity during the initial term would owe the remaining minimum charges on the abandoned capacity. The contract must run at least 15 years, and the tariff requires 60 months of written notice before a party ends or modifies service after the initial term.
Collateral could be sized to cover up to 60 months of IID’s reasonably estimated exposure, including minimum charges, replacement power, resource adequacy, power-purchase obligations and infrastructure costs. Acceptable security could include cash, a qualifying letter of credit, an on-demand surety bond or a parent guarantee from a company meeting strict credit and liquidity standards.
IID has also published a separate large-load queue process to govern feasibility reviews, full applications, study milestones and inactive projects. The district can move a stalled applicant out of the way and can study groups of projects together if a surge of requests would make clustering more efficient.
Why the 80 percent threshold matters
The tariff returned to the board after a 30-day comment period that produced 243 submissions. IID reported that 239 came from members of the public and four from stakeholders. About 185 public comments used substantially identical language and supported lowering the draft’s load-factor threshold from 85 percent to 65 percent. IID ultimately settled at 80 percent.
Paul Rodriguez, IID’s deputy power manager, said the district did not want the tariff to sweep in more conventional industrial operations simply because they use a great deal of electricity. Some mineral extraction and manufacturing facilities can operate near a 70 percent load factor, he said. Computational loads, including data centers, are more likely to operate continuously and fall above the final threshold.
Aly Koslow, an outside consultant who helped develop the tariff, told the board that 80 percent was high enough to capture most computational demand without automatically pulling future manufacturing or mineral-processing plants into a framework designed for a different risk profile.
IID staff said the work began as large-load issues attracted national attention following grid reliability problems in Northern Virginia, home to the country’s largest concentration of data centers. The district reviewed federal reliability guidance and utility practices elsewhere as it built its own process.
Eugenio draws a hard line
After other directors praised the tariff’s ratepayer protections, IID Board Chair Karin Eugenio made a broader statement about the dispute over large projects and the pressure she said she faced. Her full comment at the Sept. 15 meeting was:
IID Board Chair, Karin Eugenio.
“Last week, legal papers were delivered to my home, the home I share with my daughter. I was not named in that lawsuit, but they came to my door anyway. That crossed a line. It was intimidation, and it was an attempt to silence me. But I will not be intimidated. I will not be silenced. And I will not stop fighting for the very people who entrusted me with this office.
“We are here because of failed leadership. Public officials ignored our warnings, dismissed our concerns, divided our community and betrayed the public’s trust. Our community deserved better then, and it deserves better now.
“As a public utility, we must provide power to applicants who meet the established requirements. But we have an equally important duty to protect the public. We are protecting our families. We are protecting our water, our air, our land, our agricultural economy and our children’s future. This is our home, not a dumping ground and not a colony for outside interests to exploit.
“To those who want to build here, respect us, protect our resources and leave our community better than you found it. As a board, we promise to defend this community, and today we are keeping that promise. But we did not do it alone.
“So again, I’d like to reiterate a thank you to our general manager, Jamie Asbury; our general counsel, Wayne K. Strumpfer; our power manager, Matt Smelser; Paul Rodriguez; and all the staff who helped make this necessary action possible.
“But most importantly, thank you to the members of this community who stood together, demanded accountability and refused to be ignored. And to those who created this division and betrayed the public’s trust, do better and remember who you were elected to serve. With that, I will ask for a motion.”
Eugenio did not identify the lawsuit, the people who delivered the papers or the public officials she criticized. Her remarks showed how far the issue has moved beyond technical tariff design and into a wider dispute over development, environmental protection and public trust.
A utilitiy rule, not a land use approval
The tariff answers only part of the large-project question. IID decides whether and on what terms it can provide electricity. Cities and counties retain authority over zoning, land use and project entitlements, while environmental review and permitting govern water, air quality, backup generation and other site impacts.
One public commenter, IID customer Jake Tyson, urged the board to go further by requiring verified water supplies and completed environmental reviews before energization, binding environmental protections in each service agreement, public compliance reporting and mandatory collateral for potential exit fees. The board approved the tariff as presented.
IID’s own data-center information page says the district will evaluate power and water feasibility, require developers to pay for triggered infrastructure, enforce environmental requirements and seek to prevent stranded assets. But a utility service agreement cannot substitute for a city’s land-use decision or guarantee that a proposed facility will be built.
That distinction is especially important in Greater Palm Springs. Four Coachella Valley cities now restrict or prohibit data centers. Coachella permanently banned them after ending its agreement tied to the proposed Coachella Valley Technology Campus, while Indio, Desert Hot Springs and Palm Springs have used moratoriums to study restrictions or permanent rules.
The former Coachella campus concept had been described as requiring roughly 270 to 300 megawatts, many times the threshold for Schedule LL. The project is no longer moving forward, but its scale illustrates why IID’s new terms matter. A future project of comparable size would need far more than a willing land-use jurisdiction. It would need a financeable power plan, extensive system studies, major infrastructure, substantial security and the ability to operate under interruptible service.
An application is not a reservation
IID’s new large-load customer portal makes another limitation explicit: submitting an application does not reserve electric capacity, establish a place in the queue, guarantee service or obligate the district to build facilities.
That leaves the undisclosed inquiry pipeline as the next major question. IID has a tariff, applications and a queue process. What the public still does not know is who is seeking large blocks of power, where the projects would be located, how much combined demand they represent and whether any have advanced beyond an initial feasibility inquiry.
The board’s vote therefore closes one phase and opens another. IID has written the rules. The next test will come when a developer tries to prove a project can meet them without shifting cost or risk to the public.
Bob Marra is the CEO/Publisher of GPS Business Insider and GPS Market Intel. He has been studying, writing and giving presentations about business, economic and public affairs news and issues and the local economy in the Greater Palm Springs/Coachella Valley region for more than 20 years.
